As an attorney who specializes in bankruptcy, I can’t help but note with dismay the huge increases in retail bankruptcies, and of course it’s the smaller businesses that provide the majority of American jobs that are feeling the heat. Retailer bankruptcies are turning into what CNN has called “a bloodbath” and there are retail stalwarts from Neiman Marcus Group to 99 Cents Only Stores facing the down the bankruptcy beast. The ripple effect isn’t being felt in the board rooms, but rather in the living rooms of the people who work for these companies. Retail for years has been known for low wages, absent benefits, grueling and at times uncertain hours, and the squeeze is tightening.
What’s Happening With Retail?
Pretty simply, it’s not the 90s any more. Malls were once a place to pick up everything from major appliances to boutique items, hang out, and find entertainment. Then came the internet, a middle class wage squeeze, and two recessions. All of this culminated in people working more jobs and having less time to shop, less money to shop, and a bigger inclination to look for deals. Today’s much (and unjustly) maligned Millennials and Digital generations saw once of the biggest all time financial and economic train wrecks since the Great Depression, and adopted the financial habits of the smallest generation in American history – the so-called Silent Generation. Born from 1925 through 1945 this generation saw war and economic disenfranchisement on a massive scale. They spent little, worked hard, and steered clear of debt as much as possible.
At the same time that the Millennials and Digitals were seeing the train wreck, Gen X was on the train going off the rails. They were hit hard by a confluence of the mortgage crisis, student debt, household debt, and job losses. They burned through savings, and have not recovered as much as everyone seems to think that they should. Boomers, better established when the Recession hit were affected, too, but having had time to amass more assets, were not hot as hard. Even so, many have delayed retirement or may not be able to retire at all. There are a number of people working multiple jobs, and a number of people in the workforce longer, creating a bottleneck that keeps people from moving up, and wages low.
On top of this, America was over-malled. It’s not really the fault of cities – retail is a huge part of the tax base. At least, it is when the malls are operating. Mall death happens where there is not enough of a customer base to support the stores, and the stores close rather than pay overhead costs like rent and utilities in a failing location. In some cases, the penalties for breaking a lease are less than the cost of staying in. The storefronts go dark, and people go out of work, and the pain is felt up and down the economic ecosystem.
And, finally, we come to everyone’s favorite Big Bad – Amazon. One can dispute the quality of jobs that it provides, examine the corporate culture, but there is one thing that Amazon offers that nobody else can. It gets to your doorstep, you get a good deal, and when you are working two or three jobs it means that you don’t have to haul out, burn up a few precious hours, and go get it yourself. It’s not that people are lazy, they are working harder than ever for less that does less. It’s economic pain, squeezed onto a timeline that says, “If I work full time, drive for Uber, and go to school, I do not have time to get paper towels and dog food.”
In short, don’t blame Amazon for retail bankruptcies, look at the bigger picture.
Feeling the Pain?
If you are feeling the pain, it’s not time to shoehorn another job into that packed timeline. It’s time to sit down and look at real solutions to the pain. Whether it’s a bankruptcy, a consolidation, or other solution, you can and should schedule a free consultation with us. Our offices in Fort Lauderdale and West Palm beach are open seven days a week – and your initial consultation is free. Call us today and get off the train wreck, and put your life back on the rails.